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Allergan Management Discusses Q2 2012 Results - Earnings Call Transcript

Stocks in this article: AGN

Year-to-date, we've been able to grow Allergan's total sales by 9.5% year-over-year in local currencies, despite challenges in the global economy. Benefiting from our global footprint, our international sales in the first half grew double digits in many businesses namely: Ophthalmic pharmaceuticals, BOTOX, dermal fillers and breast aesthetics. In fact, all of our consumer-facing businesses performed rather well so far this year.

Regarding operating performance we generated in Q2, non-GAAP diluted earnings per share of $1.07, marking an increase of 11.5% over the prior year and $0.01 over the top end of the range of expectations provided at our last earnings call.

Year-to-date, non-GAAP diluted EPS has increased 11.6% versus 2011. In the first half of the year, we have also continued to invest in the long-term success of Allergan, investing $457 million or 11.4% more on R&D on a non-GAAP basis. For a reconciliation to GAAP numbers, please consult our press release.

Now commenting on the performance of the individual businesses. Ophthalmic pharmaceutical sales increased in Q2 versus the prior year at a slightly lower rate than normal, at 6.5% in local currencies and 1.9% in dollars, and with year-to-date growth at 9.1% to local currencies and 5.9% in dollars.

The year-to-date growth in local currencies is more in line with the historical performance for this business. The Q2 growth rate was dampened by the U.S., which I'll comment further, while international sales grew in local currencies year-over-year, 11.0%, and year-to-date, 12.2%, with double-digit growth in all the 3 -- in all the x U.S. operating regions: Europe, Africa, Middle East, Latin America, Asia-Pacific and Canada.

The IMS Global report for the first quarter of 2012, the last period for which data is available, shows Allergan growing in-market at 8% and outperforming Alcon, Novartis when one excludes the retina segment. Compared to the first quarter of 2011, the IMS reports shows Allergan gaining share strongly in glaucoma and in retina on a small base, as well as an uptick in share in artificial tears, driven by the recent launches of OPTIVE Advanced marketed as OPTIVE Plus outside the U.S.

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